Is Predictive the New New Thing in Marketing Technology?

It’s an exciting time to be working in
marketing. We are amidst an important transformation with data at the
forefront and technology steering the course for marketing and sales
professionals. In just the past 12 months, almost $200 million in VC
funding has gone into predictive marketing and sales software companies.
Why all the interest?
CRM systems like salesforce.com essentially come as an empty box
because they were built at a time of data scarcity and have not kept up
with the abundance of data that is now available. It does not yet
leverage the power of predictive analytics that could improve a rep’s
win rate by telling them which accounts they should focus on.
The use of marketing automation technology is becoming the norm in
many organizations with adoption rates reaching 80 percent, which leaves
many marketers wondering, ‘what’s next for marketing technology?’ With
over 900 marketing tech vendors and counting, it is easy to get lost in
the options and opportunities. (See the LumaSCAPE,WorkBench and Chief Mar Tech samples.)
Meanwhile consumer companies like Amazon, Uber and Netflix have
proven the power of using vast amounts of data to make predictions about
customer buying behavior. Businesses are demanding and many are already
experiencing the same level of innovation – the consumerization of B2B.

Predictive Tech for Business Takes Off

According to CBInsights, just last year over $2.5 billion in venture
funding went to marketing and sales technology companies. Looking back
over the past four years, we’ve also seen a flurry of activity in the
M&A and IPO front, with salesforce.com acquiring ExactTarget for
$2.5 billion, Oracle acquiring Responsys for $1.5 billion and Marketo
going public. We’ve also seen newer marketing automation vendors like
Autopilot, Captora, Act-On and Intercom raise more capital this year.
Most recently, Salesforce’s acquisition of RelateIQ for $390 million
is a step forward, but it still has a long way to go to offer customers
predictive capabilities. The larger automation vendors in general are
behind in this area.

The early adopters of marketing automation were some of the savviest
marketers, and they are now looking for the next thing in marketing,
among the fragmented tech landscape. Many of these cutting-edge
marketers are turning to predictive applications, which is why we
believe in the growing trend of predictive marketing.

The Rise of Predictive Marketing

Though it may feel foreign to marketers, predictive analytics can
uncover fresh insights about your prospects and customers. It can also
accurately predict buyer intent, in turn helping you better understand
how customers will respond to messages, offers and interactions in ways
that were previously not possible. By leveraging data science to make
sense of all the data available, the savviest companies are marketing
and selling more intelligently. Predictive analytics is emerging as
central to the modern marketing organization. DocuSign,
one of our early customers, has experienced a 22x ROI and 38% lift in
opportunity conversion in the first two months of using Lattice
applications to fuel its predictive marketing efforts. As part of a
larger initiative to complete reengineer its demand funnel, CA Technologies experienced a 400% improvement in its lead conversion with Lattice.

While the concept of predictive marketing is now emerging as the next
frontier, the truth is that the technology has been around for some
time. Lattice entered the space back in 2006 and with the market now
catching up, some of the best names in venture capital are jumping in
and investing in the opportunity. We recently studied the growing
landscape of companies utilizing data science to provide marketers with
predictive applications. You can see our research in our latest
infographic, The Next Frontier of Marketing Tech, originally posted on VentureBeat.